Housing Shortage Continues to Plague Buyers

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As we continue to adjust to Daylight Savings, the adjustment to low inventory remains as buyers are left with fewer home selections at higher prices. Click here for chief economist, Mike Fratanoni of the Mortgage Banker's Association synopsis on Squakbox. Adding to this already plaguing situation is stagnant income growth, knocking homebuyers down even further. 

3 Ways to Stand Out on a Purchase Offer and WIN!

  1. Pick a GREAT agent. Not a good agent. A great one. Someone who understands everything about your home purchase. From the pre-approved amount to the time frame and beyond.Strategic planning and communication are key.
  2. Provide pictures and a write up about you, your employment and family. Strike an emotional nerve with the seller. Draw on their emotions. Pitch yourself and your love for the neighborhood, freeway access, proximity to grocery shopping, cafes, hikes, etc. 
  3. Pre-approval or Approval with TBD. Imperative. No questions asked. Be pre-approved or fully approved with a To Be Determined on the address. Many lenders will do this and WANT your business. Handle it no matter how crappy providing all your tax returns and bank statements seems. It's one of the main points to win the deal.

 

Stretch your buying power with an ARM loan. If you don't know if this is the forever home or even if it is, look seriously at an ARM loan. The lower rate could save you hundreds of thousands in interest, paying down the principal faster and refinancing (if it makes financial cents) to reduce the rate and term. We offer free mortgage consultations. 

2018 Top Trends in Kitchens-It's not what you think!

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Clutter Free Counters

The #1 2018 kitchen trend according to a Houzz study, reported on Builder. Is it possible to maintain and still find storage? The study by Houzz outlines kitchen trends homeowners are incorporating into their kitchen designs and remodeling. Take a look at some stats below:

Kitchen Storage

With Clutter-free space, where's the storage? Trends in storage for high functioning, high traffic kitchen might opt for designs like those made by Wellborn. I haven't used Wellborn myself, however, according to the website, it's a family owned and operated business. There are 6 lines of products includes Home Concepts, Premier, Estate, Elegant Bath, and Wellborn Closets. There is also a creative element for the DIY'er in the Estate Collection. Beautiful solutions for much-needed storage in busy households. Contact the company on their site for sales options.

Cleaning Products for Quartz

According to the Houzz survey, a whopping 43% of homeowner's prefer engineered quartz. Cleaning quartz isn't hard once it's been sealed. Bob Vila, TV personality, quartz care is as simple as wiping with a mild, non-abrasive cloth and dishwashing detergent. He recommends non- abrasive sponges and surface cleaners for a deeper clean. Though quartz will resist permanent stains from wine, tea, etc. he suggests not placing heat about 300 F on it or using it as a cutting board. Drastic changes in temperature can break down the resin found in quartz. Knife slices will leave marks!

Easy Made from Scratch Food Dishes

The survey reports 48% of homeowners prefer cooking from scratch. I'm in this category. Cooking is my jam. I love it. I'm plugging Ina Garten, aka Barefoot Contessa not because I'm getting paid (nada, nothing) I really love her recipes. I watched all of her Food Network shows when my daughter was first born, but she really hooked me when she signed her Back to Basics cookbook my mom bought me for Christmas years ago. So exciting! Ok, enough girl gushing, her cookbook, How Easy is that provides lots of homemade dishes that taste and look like they were professionally cooked. Combining both is the dream. Quality, substance, and sustenance. I do also use All Recipes (old fashioned pancakes, yummy!) and I use Food Network. They both offer a variety of options for Quick and Easy Meals. I'm also a huge fan of the crockpot. I cook our chicken in it for Taco Tuesday (Every week. Meal planning saves me from hangry kid and spouse). I will share my secret ingredient in another post. 

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3 Ways to Boost Your Credit for a Home Loan

Credit

We know credit is important and essential to financing. Lenders place a significant weight on past, present and future credit. What do lenders look for when determining creditworthiness? They take the middle credit score from the three credit bureaus they pull from. It’s the number, lenders use to gauge the 3 C’s:

        Character
  
        Capital
    
        Capacity    

 Breaking these down, it makes financial sense why lenders delve into your
 personal information to better understand their return on investment (ROI).

Character-Defined by the author, Mohamed Ayed, “May your character preach more loudly
than your words”. Lenders are looking at your credit history to
determine your ability to repay and at the likelihood of default. Questions
they are using may include the following:

  • Are your payments made on time?
  • How many revolving (credit cards, lines of credit) and installment loans (auto, unsecured personal loans) accounts are in your name and how long have payments been made?
  • What is the length of employment at your current job?
  • Have you lived at the same address for 2 years?
  • How long has your credit file been in existence?

How do you boost your character and credit rating? For starters, get a copy
of your annual credit report for FREE. Click here. You can view your past
and current credit history and begin to fix any items lenders may find
character worthy i.e. late payments and high balances on revolving accounts to name a few.


    Download our E-book: $0 Down Payment Home Loans

 

Capital-Show me the money. The lender reviews assets such as liquid assets: checking, savings,
money market, CD, stocks/bonds and mutual funds. Is there a property that
will secure the loan? The capital reflects the investment you will
contribute to a purchase and contribute to the down payment and closing costs.

 Capacity-Lenders review your current employment and income sources. They
 are looking to verify you can repay the loan and have set a debt-to-income
 ratio factor to determine eligibility. It’s important to understand your
 salary and likelihood of future employment, your current debts and expenses
 and financial accountability.
 

E-book: How to Boost Your Score for a Better Interest Rate

 

What if you need to dispute items on your credit report? All three credit bureaus
have a process of disputing items. Click on each one for the
dispute process, Experian, Equifax, and Transunion.

Talking with a mortgage professional that understands their lender
guidelines, products, and programs can assist you in building and re-building your credit for success and loan approval!

San Diego Market at a Glance-Fierce Competition to Purchase Continues

 San Diego Summer Sunset   

San Diego Summer Sunset

 

As we head into San Diego's version of Fall, with humidity and heat still rampant throughout many parts of the county, the housing market continues to hold an advantage to sellers as buyers struggle with low inventory and a competitive market place with multiple offers. Interest rates  have remained steadily low, hovering around 3.75%/3.97%APR* for a Conforming 30 year fixed loan. 

Averaging less than 30 days on the market before active listings drop into pending with accepted offers, being prepared with pre-approvals, proof of funds and plenty of patience as buyers navigate the home buying process. What can buyers do heading into the San Diego housing market?

Preparation is Key: 

Dot your I's and cross your T's. Obtain your mortgage loan pre-approval in advance. Gather bank statements that reflect your down payment and Earnest Money Deposit (EMD). If a family member is gifting you funds, have the Gift Letter from your lender ready to go. The competition is real. Cash is King. Buyers with financing need to be ready and organized to compete.  

Research:

Understanding the demographics, housing statistics and other variables is vital to your offer. Working with a real estate agent that can explain and negotiate on your behalf can have an impact on your offer. Communicating with your agent is really, really important. Be clear in your budget and wants vs. needs list. 

Credit: 

Try to keep purchases to minimum and refrain (as best you can) from obtaining new credit. Additional paperwork, Letters of Explanation and other items may be needed to determine your eligibility once new credit has been obtained or credit card increases are made. The lender is looking at your debt and income and calculating it on a ratio. Depending on the loan, it can be quite conservative. Make your current payments on time. 

*Rate and APR based on today's interest rates September 19. 2017. Not all borrowers will qualify. Rates subject to change. 

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Loan Land-Here's how it's looking

Hovering in the high 3's and low 4% range today as we await the Federal Reserve announcement  and the impact on the market. My conservative approach to rates kicks in and I say lock at your comfort level and leave gambling to the casinos. 

We offer free, no cost or obligation market information. Email the city within San Diego and we send you the stats.

Equifax Hacked: 143 Million possibly affected, are you one of them?

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The data breach at Equifax has many folks up in arms and rightfully so. 143 million adults in the country may have been affected by hackers. What happened?!! Sometime between May and July, Equifax one of the top three credit service providers, had thieves access social security numbers, addresses, birth dates and in some cases, security code questions. What's even more troubling, is the company's response, or lack thereof. They've not been real clear on what they're doing to handle this debacle and aren't doing us any favors by contacting us directly via phone, mail or email if we have in fact been hacked. They are currently directly consumers to a website to identify if their personal information was compromised. You can access the website on Equifax's home site, however, you will be asked additional security questions. If you're not comfortable releasing more personal information, see below.

EQUIFAX CREDIT HACK-WHAT CAN I DO?

  • Pull a credit report for free through Free Annual Credit Report.  This is a free personal credit report that provides detailed information on your personal credit profile and is not an inquiry on your credit report.
  • Contact your credit card company. Most credit card companies typically have a fraud alert service that will email, call or text your regarding any unusual activity. You can view your transaction history and set up alerts for purchases. Inquire with your them on additional safety features to protect your credit.
  • Contact your bank, check your bank statements, and all other personal documents to verify fraud has not occurred on your accounts.

Check out NBS News video on the hack below:

 

Stated Income is ALIVE!

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Prior to the 2008 mortgage melt down, stated income or no income document loans were the norm. Flash forward to present day (September 2017) and they are rare. Very rare. So, what is stated income and who qualifies? Here is a quick breakdown of stated income and who qualifies to use it.

Stated Income*

  • Assets are a must. 6 months principal and interest required in assets/reserves for owner-occupied purchases <$1 million, 60% loan-to-value. 12 months assets required for greater than 60% loan to value, less than $1m purchase price. 
  • Minimum FICO credit score 700.
  • STATE your income and provide assets in the form of bank statements.
  • Rates and loan programs are competitive. Since there is more risk involved for the lender based on not using a borrower's income documents (no tax returns, W-2's, pay-stubs required), the loan program offered is an Adjustable Rate Mortgage (ARM). Fixed for a set period 3, 5, 7, 10 years, adjustable annually thereafter with a cap and amortized over 30 years. Inquire with a TRU Financial Services loan officer for details on current rates.
  • Primary, second home and investment loans available. 
  • U.S. citizen, permanent resident, non-permanent resident, and foreign nationals are eligible to apply.

*Stated income parameters are subject to change. Not all borrowers will qualify. Consult a qualified, licensed mortgage professional.

The stated income loan product can be used to assist borrowers that are self-employed or earn bonus and commissions, subcontractors and W-2 wage earners. A FREE consultation with a loan officer that offers stated loan products could determine eligibility. Many of the same loan document requirements minus income documentation are required for these loans. 

San Diego Year over Year Price Increase Sustainable at 5.7%

San Diego Coronado Bridge

America's finest cities housing prices increase at a lower rate than the national average. According to an article in the Union Tribune, the change from year over year increase from January 2016 could be based on higher interest rates. Click here to read full story. Post election, rates have been slowly on the rise. The median housing price in San Diego as of February 2017 is $495,000.

As many buyers feel the burn of multiple offers and expedited days on the market until pending, the inventory shortage in San Diego is apparent. With sellers less likely to complete repairs or issue credits for deferred maintenance, buyers may feel challenged by the current market environment.

3 Ways Buyers Can Stand Out

  1. Pre-Approval-Lender pre-approvals are a must. FICO credit score and full loan approval complete the package.
  2. Flexibility-In a housing shortage, buyers willing to rent back to sellers while they look for housing post closing may be perceived as more desirable.
  3. Ask Questions-Sellers have different motivations for selling. Asking questions and listening to the sellers needs, can assist a buyer in preparing an offer that meet and exceeds the sellers expectations.

A main point I discuss with buyers in a sellers market is perseverance. The market can be challenging and maintaining a positive approach can assist in easing the tension and stress of home buying. 

Single Women Outpace Single Men in Real Estate Purchases

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Single Women Purchase Homes at Twice the Rate as Single Men

The kindest words my father said to me
Women like you drown oceans
— Rupi Kaur

According to a Bloomberg report, single women account for 17% of homebuyers to single men's 7%. Single women are building their own wealth, realizing their purchasing power and not waiting to "couple" before pulling the trigger to purchase (Bloomberg, 2017)

Women earn 83% of Men's earnings -Bureau of Labor Statistics

Still earning less than male counterparts, women's price points tend to be lower than mens. Wage disparity may be the cause of reduced purchasing power.  Single women have been outpacing men in home purchases since 1981 according to the National Association of Realtors.

Research completed by professor Bella DePaulo at University of California Santa Barbara states, "Despite the stereotypes that insist women care more about marriage than men do, it may actually be single life women embrace more than men...unmarried women may be likelier than men to seize singledom as a lifestyle".

women and the glass ceiling
I took a deep breath and listened to the old bray of my heart. I am. I am. I am.
— Sylvia Plath

Realtor Magazine completed a study in 2015, surveying 1,000 single baby boomer women and found female adults ages 50-68 are confident, happy and thriving. 74% of the women surveyed said they were as happy or happier than at age 35. Full article here.

Leading an active life and being physically healthy through exercise were a major part of the study. It may reflect the location choices women make and what builders should include in planned development communities.

 

Why Zillow's Zestimate is not the King of Value

San Diego House

Your actual San Diego home value

It's easy to cruise the user friendly websites of Zillow and Redfin searching for homes and reviewing "Zestimates" on Zillow for home values. However, consumer be warned, Zestimates pull from the deed recordings in a demographic area which can include refinances and transfers between family members. They do not take into account upgrades or the condition of the home. We often determine, once compared to actual closed sales on the multiple listing service, the values are too high or low (Taufen, Inman News 2017). 

So basically, it still takes a real human to research, review and compare homes sales to estimate your home value. Some questions to ask yourself and consult with a listing agent:

  • Do you want the best information available on pricing your home and when to place it on the market?
  • What would you like to see in a marketing plan to sell your home?
  • What is your time frame for selling your home?
  • Do you need to sell your home before purchasing another?
  • Is your house ready for the market? Upgrades, cleanliness, curb appeal.

Is it the right time to sell?

time to sell san diego home

This question comes up a lot on both sides. Is it the right time to sell? Is it the right time to buy? In short, yes. It's always the right time if you're ready to buy or sell. As cliche as the answer, San Diego has consistently increased in value over the years and rebounded from down markets. There are no guarantees for the perfect buyer or the ideal seller. This is life. It gets messy and hard and really complicated sometimes. This is a major sell or purchase. It's personal.

What's the best time to sell a San Diego home?

According to Zillow, in San Diego it's April 1-15th. Their research shows, you are more likely to receive a 1.3% increase in sales price. The chart below outlines the research data. (Inman News, 2017. Zillow Data). Click here for full article.

San Diego best month/day to sell

Questions? We would love to assist. Email or phone or meet in person with no obligation. 

 

 

 

From Wall Street to Main Street: Scaling back Dodd Frank

What is Dodd Frank and Why it Matters

In a nutshell, Dodd Frank was passed by Barack Obama in 2010 as part of a Wall Street Reform and Consumer Protection initiative after the financial crisis of 2007-2008. It was the largest overhaul to our financial regulatory system since the Great Depression. Pretty significant.

Some of the main pieces to Dodd Frank include more transparency and accountability for large banks and financial institutions. Essentially, no more bailouts. The bailout during the financial crisis of 2008 cost the United States Treasury Department $700 billion. This was not the biggest bailout the U.S. made, it's still ongoing. According to TARP, the U.S. committed, $16.8 trillion with $4.6 trillion already paid out leaving the banks to big to fail. Read more here on the bailout. 

What could happen in repealing some regulations of Dodd Frank?

  • Greater financial lending for smaller community banks and institutions.
  • Less regulation and oversight of bank activities.

In a nutshell: Arguments for and against include, more lending could mean increased access to credit and mortgage loans, although this could leave the industry open to repeat history and the risky lending of past days, with taxpayers footing the bill for bailouts. Stay tuned.

San Diego 203k Renovation Loans: Use Lender Cash to Renovate

San Diego's current housing shortage provides current homeowners and home purchasers the chance to renovate a home with your style and design in mind. 203k FHA Renovation Loans are not for the faint of heart. My advice: Have a plan, find a solid contractor, and set expectations. In addition, work with a loan officer that has either many years in the business or has completed many, many renovation loans. A solid mortgage advisor is not only helpful and will expedite the process, they are worth their weight in gold.

San Diego Renovation Loans: Quick List for 203k Loans

1. Have a Plan: Make a list and separate "needs" from "wants". This will be helpful when hiring a contractor to itemize your priorities. Take inventory of the house yourself and be prepared for the contractor to find things outside your scope. Consider paying for a home inspection. This independent 3rd party will assess all the challenges your home currently faces. A contractor can work off this inspection, saving time and money.

2. Find a Contractor: Contractors are a plenty, however, find one that really understand the needs of the job. Lenders want all I's dotted and T's crossed. Liability insurance and workmen's compensation are required. In some cases, depending on the renovation expenses, they will will be accountable to a 3rd party that will oversee their work. Remember, you're working on the lenders money. Be clear and specific. A contract will be signed prior to commissioning work.

3. Set Expectations: Understand your goals and communicate them to the contractor. Check in and insure they are being met along the way. Open communication and setting expectations up front will save everyone time. Talk to a real estate professional and/or your mortgage consultant on what renovations will add value to the home, i.e. new windows, central heat/air, electrical, etc. This may assist in selecting a "need" over a "want" as it increases your property value and ultimately your equity in the home.

When in doubt. Ask your lender. Making changes to estimates or sub-contractors selected can be a recipe for disaster. Always, always ask your lender first and get it in writing. Communication and written proof that a change has been approved are key to keeping more money towards the project. Take good notes and save receipts and invoices. They can become your lifeline to communicating with all parties. Fix it, don't nix it!

 

TRID: The Ins and Outs

TRID became effective October 3rd, 2015. As with most change, it takes time. In TRID's case it took 30 years to revise and revamp outdated forms and language.

TRID: The Breakdown

The TILA-RESPA Integrated Disclosure integrates The Good Faith Estimate and The Initial Truth-in-Lending Statement and combines them into a new form called The Loan Estimate. The Loan Estimate assists consumers in understanding key areas of mortgage loans, risks, costs and relative information a consumer is interested in when shopping mortgage loans and interest rates. It must be provided no later than the third business day from applying for a loan. What is considered a loan application?

6 DATA Items that trigger The Loan Estimate for TRID:

  1. Name
  2. Property address
  3. Income
  4. Estimated value of property
  5. Social security number
  6. Mortgage loan amount

Once these items have been received, the lender/loan officer must be prepared and sent within 3 business days. The costs, key features and other related items must be accurate. There is a zero tolerance in effect for increasing key costs.

2 DATA Items acceptable to trigger a Change of Circumstance:

  1. Rate lock
  2. Unknown information at the time of Loan Estimate. i.e. Borrower requested change or change in borrower pre-qualification.

Lenders, loan officers, and borrowers must work together to insure accurate information from the beginning to quote costs and key features. The HUD1 and the Truth-in-Lending Initial and Final have been combined into one form called The Closing Disclosure. This must be issued 3 days prior to closing and the consumer has 3 days to review. We've got a road map to the dates and time lines.

After surveying several hundred consumers, it was found the old forms were confusing, outdated and needed revision. Although change sometimes has it's challenges at the beginning, we're thinking TRID does assist in streamlining costs, key features and benefits the consumer with less paperwork.

 

 

Disputing Your Credit Report

While disputing your credit report may not fall into the top category of fun things to do...ever. It's sometimes necessary. Empower yourself with the most current information on how to dispute creditors and why you shouldn't wait.

Disputing Credit Items:

  1. Creditors: Contact the credit agency that reported the item directly. Sometimes based on timeframe, they may remove the item. Requesting a copy of your driver's license and other personal info. may be necessary to identify you. Start to finish, this can take up to 60 days. Best to get it done right away rather than wait. The item on your credit could impact your credit score and thus your interest rate.
  2. Credit Agencies: TransUnion has it's own online dispute system. Gone are the days of writing a letter to be lost in the abyss. Complete their online form to get the process started. They will contact you via email to follow-up. Click here for TransUnion. Check Equifax and Experian for a similar process.
  3. Protect Yourself: Signing up with any of the three major bureaus as a member will give you benefits such as identity protection, fraud alerts, and credit score monitoring to name a few. This may assist you in keeping tabs on your credit.

We have an abundance of experience disputing credit report items and assisting our clients with rapid rescores. If dispute is not an option before your purchase, not all hope is lost. Contact us for a Free, No obligation consultation and how we may assist you.